It never seems to stop. Every day carries a story of another bank bailout. This time, it is a Belgian bank receiving the cash. From today's FT:
KBC Group, one of Belgium’s largest remaining banks, is to receive a €2bn cash boost from state coffers after it incurred a full-year loss of €2.5bn.
Meanwhile, over in America, Citibank has its hand out again. It wants the US government to take over its bad debts. From the BBC:
Citigroup's new chairman says that if the US government took bad assets off bank balance sheets, banks might be able lend more money.
With a mixture of threats and promises, banks around the world have extracted enormous amounts of money from taxpayers. They have pulled out so much money that long term fiscal sustainability in many countries has been undermined. In reality, governments have substituted one problem for another. Instead of banks going bankrupt, it is the public sector that is likely to default.
3 comments:
In the UK, I guess that the bail-outs are cock-up (although the nationalisation falls into 'conspiracy' category), but in the USA it's looking more and more like a conspiracy, the links between Paulson & Bernanke et al and the big banks are just too close.
"Citigroup's new chairman says that if the US government took bad assets off bank balance sheets, banks might be able lend more money."
And if you would take my credit card debit (and maybe my truck payment) off my balance sheet ... I could borrow more money. Geez, how stupid.
Once they have been bailed out once, then the gov/taxpayer is hooked. The next threat is previous bailout money will be lost if we don't get more...Equity holders should be wiped out and bond holders take a big haircut. Only the depositors should be getting saved.
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